Nigerian shares rise to five-week high on oil, banking stocks

Nigeria’s main stock index continues its steady growth as seen from beginning of December with the leading indicator jumping to a five-week high on Wednesday, climbing 1.29 percent, as rising prices for crude oil, the mainstay of the Nigerian economy, led to gains for oil and banking shares.

The stock market gained for the fifth straight day, rising above 26,000 points, a level last seen on November 8.

A total of 3,275 deals with a volume of 205,404,034 shares valued at N4,278,607,587 saw the market capitalisation closed the day above N9 trillion.

The Organisation of Petroleum Exporting Countries and non-OPEC producers last week agreed to curtail crude output and prop up global prices, their first joint agreement since 2001.

More than two years of low prices have stretched budgets and spurred unrest in some countries.

Nigeria’s government gets around two-third of its revenues from oil sales. The country is now facing a recession brought on by the effects of low crude prices since mid-2014.

The country’s woes were more compounded by the activities of the restive militant groups in the Niger-Delta region which has continually cut down the nation’s output capacity. Nigeria is capable of doing 2.1 million bpd, but has been reduced to a little above 1.4mbpd.

On Wednesday, the president presented a record 7.29 trillion-naira ($23.94 billion) budget for 2017 to lawmakers, hoping that the recent rise in crude prices would support government spending next year, which also lifted equities.

The government struggled to fund its 2016 spending plan as oil prices stayed low.

Shares of fuel retailer Forte Oil rose the maximum 10 percent the stock exchange allows. Gas producer Seplat rose 6.7 percent. Pan-African bank Ecobank rose 4.9 percent and Diamond Bank 3.5 percent.

However, Nigeria Breweries, Unilever and Mobil Nigeria are among the losers on the day.